John Paulson, a US billionaire and hedge fund manager, recently stated that against the backdrop of global political and economic turmoil, central banks will continue to increase their gold holdings, moving away from reliance on paper currency while achieving asset diversification.
Paulson entered the hedge fund industry in the 1990s and shorted approximately $25 billion in mortgage-backed securities during the subprime mortgage crisis, earning his clients a massive profit of $15 billion, earning him the titles of "Wall Street Short King" and "Number One Hedge Fund Manager."
Paulson is also one of Wall Street's most steadfast supporters of gold. He believes that as investors flee US stocks, bonds, and the US dollar, turning to safe-haven assets, the escalating global trade war has cast a shadow over economic prospects, and gold is "entering a whole new valuation level."
Paulson told the media, "This trend will continue, and its strength will depend on political dynamics."
Earlier in the day, influenced by Trump's pressure on the US Fed to cut interest rates, spot gold prices briefly surpassed $3,500 per ounce, setting a new historical high. Since the beginning of the year, spot gold prices have accumulated a nearly 30% increase, outperforming most mainstream assets.
Spot Gold Price Daily Chart
Shortly before the press release, White House Press Secretary Caroline Levitt stated that Trump believes the Fed's policy actions are politically motivated, and Trump has the right to express his dissatisfaction with the Fed. Trump hopes the central bank will lower interest rates and also wants the US dollar to maintain its status as the world's reserve currency.
However, some analysts believe that the global financial system is undergoing a transformation, the old order is beginning to collapse, and the US dollar's status as the global reserve currency is no longer so unquestionable. Gold is being quietly remonetized by global central banks, not as a safe-haven tool, but as a foundational reserve asset.
Paulson also pointed out that strong buying by central banks will be a key driver of the speed of gold price increases, "The main driver of gold demand is central banks increasingly seeking to move away from the paper currency system and allocate gold as a reserve currency. I believe this trend will not change."
For a long time, Paulson has been bullish on gold, and he has also made significant investments in mining companies through his family office. Just today, he partnered with Novagold Resources to invest $1 billion to acquire a 50% stake in a gold mining project in Alaska owned by Barrick Gold.
Some analysts believe this deal reflects Paulson's bet that under the Trump administration, large resource projects in the US will face a favorable development environment. On the other hand, it may mean he believes Trump's policies could severely impact US dollar assets, hence his bullish stance on gold.
It is worth mentioning that Paulson has been a staunch supporter of Trump for many years and was a "super donor" for Trump in the 2024 election. Trump once mentioned during a campaign event that Paulson was a potential candidate for Treasury Secretary.
Although Paulson supports tax cuts and deregulation, he believes trade "benefits the global economy," and tariffs are "a blunt tool to create a level playing field." Additionally, Paulson's attitude towards the Fed is milder than Trump's.
